Question

Landon Wallin is an auto mechanic who wishes to start his own business. He will need ​$4100 to purchase tools and equipment. Landon decides to finance the purchase with a 60​-month fixed installment loan with an APR of 6​%.

​a) Determine​ Landon's finance charge.
​b) Determine​ Landon's monthly payment.

Answer 1

a.$1230

b.$20.50

Explanation:

Assuming Landon only makes the minimum payments for the sixty months this is how you would find it

Multiply loan by percentage over the five years: 4100 x .3 = 1230

Then divide that amount by months paid: 1230/60= 20.5